This morning, i attended a fascinating forum hosted by Senator Bob Corker who was really using this forum as a means of picking the brains of a whole room full of REALTORS, Lenders, Bankers, and executives. The event was moderated by Dr. Bob Fisher, Belmont University and included 7 panelists.
Mr. Chris Katopis, Executive Director, Association of Mortgage Investors
Mr. Steve Fritts, Associate Director of Risk Management Policy, Federal Deposit Insurance Corporation
Mr. Greg Gonzales, Commissioner, Tennessee Department of Financial Institutions
Mr. Andrew Howell, Executive Vice President and Chief Operating Officer, Federal Home Loan Bank of Cincinnati
Ms. Loretta Owens, Executive Director, The Housing Fund
Mr. Jim Vogel, Executive vice President of First Tennessee Financial
Mr. Jamie Woodwell, vice President of Commercial/Multifamily Research, Mortgage Banker Association.
There was ample “fire-power” on that panel.
Add to the mix a crowd of @ 150 of the best minds in the industry (in the “congregation” as one participant called it), and we had a very informative and awe-inspiring session.
My significant take-away is that the sky is not, in fact, falling . . . but we do have a LOT of work to do.
There’s NO way I can write stream of consciousness and do this meeting justice . . . It was a phenomenal event and was refreshing to hear that Bob Corker was there to find ideas for structuring new legislation to find the “right” mix of Geovernment regulation/involvement as we seek local and National economic recovery in the form of a “reform” in January.
What I can do is write my notes here . . . and leave it to the reader to create the context.
“Dodd/Frank Bill” 2400 pages – So many pages – So little content
The capital (mortgage) environment during the “good Years” 2000-2006 frenzy was like a casino – Investors doing high stakes gambling.
In china during that 6 year period the number of “Middle Class” people rose from 174 Million to OVER 806 Million
the 3 sources of Capital to fund mortgage financing – Banks – GSE – Mortgage Investors
“Securitization” by Mortgage Investors is “on hold”. they are on Strike from investing in mortgage market until the Fed picks a clear direction (path).
A return to “Traditional Underwriting Standards” – FDIC recommends a “Safe Harbor Product” that supports securitization – Back to basics.
Financial Education (including housing) should be required at all levels
This really is a “Consumer Debt Crisis” – Many of the upside down mortgages are that way because of their other debt – Car notes, boat notes, credit cards
WOW! The mortgages are not necessarily the problem . . . It’s the CONSUMER DEBT that is sinking the ship. People are walking away from their highest monthly expense (mortgage) all the while continuing to incur consumer debt. additionally, they are begging for mortgage relief at the same time.
Over-regulation is a self-fulfilling Prophecy
An uncertain regulatory landscape creates HUGE cost for the companies attempting to stay in compliance.
At a time when we needed clarity, we got 3 years of non-clarity (the Dodd/frank Bill)
The medicine is killing the patient – 4 states’ bubbles burst and ALL states must take the medicine
The good news from this is that I heard a Spirit of cooperation and a clear effort to UNDERSTAND the issues as we see them here in the trenches.
Bob Corker was very clear that this new legislation may be the most difficult new piece of legislation yet . . . That it will likely become a huge partisan battle . . . and that it is definitely important enough to go into it as clear understanding as possible of the real scope of the issues at hand.
I’ll be right in the midst of as much of this as possible . . . and I hope that you will dive in and participate any chance you get.
We ALL need to voice our opinions LOUD and CLEAR . . . because the next few months are going to be pivotal months for our collective economic future.
I’m just sayin’